Question 1

It is possible for one person to have a comparative advantage in the production of both goods being produced.

Accepted Answer

A) True 
 B)False

Question 2

Exhibit 2-5
  
-Refer to Exhibit 2-5.Which of the following labeled points are productive efficient?

Accepted Answer

A)  A, B, C, D, and E 
B)  B, C and D only 
C)  C only 
D)  All of the points are productive efficient. 
E)  None of the points are productive efficient. 
A)  A, B, C, D, and E 
B)  B, C and D only 
C)  C only 
D)  All of the points are productive efficient. 
E)  None of the points are productive efficient.

Question 3

Carlos can produce the following combinations of X and Y: 10X and 10Y,5X and 15Y,and 0X and 20Y.The opportunity cost of one unit of X for Carlos is

Accepted Answer

A)  1 unit of Y. 
B)  2 units of Y. 
C)  1/2 unit of Y. 
D)  1/4 unit of Y. 
E)  none of the above 
A)  1 unit of Y. 
B)  2 units of Y. 
C)  1/2 unit of Y. 
D)  1/4 unit of Y. 
E)  none of the above

Question 4

Exhibit 2-5
  
-Refer to Exhibit 2-5.As more fax machines are produced,the opportunity cost of producing them

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  first decreases and then increases. 
A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  first decreases and then increases.

Question 5

Exhibit 2-8
  
-Refer to Exhibit 2-8.Who has the comparative advantage in the production of good Y?

Accepted Answer

A)  Maria 
B)  Maya 
C)  Both Maria and Maya 
D)  Neither Maria nor Maya 
A)  Maria 
B)  Maya 
C)  Both Maria and Maya 
D)  Neither Maria nor Maya

Question 6

Exhibit 2-9
  
-Refer to Exhibit 2-9.Who has the comparative advantage in the production of good B?

Accepted Answer

A)  Alex 
B)  Adam 
C)  Both Alex and Adam 
D)  Neither Alex nor Adam 
A)  Alex 
B)  Adam 
C)  Both Alex and Adam 
D)  Neither Alex nor Adam

Question 7

An advance in technology commonly refers to the ability to produce

Accepted Answer

A)  the same output with a smaller quantity of resources. 
B)  more output with a fixed quantity of resources. 
C)  more output with a greater quantity of resources. 
D)  both a and b 
E)  both b and c 
A)  the same output with a smaller quantity of resources. 
B)  more output with a fixed quantity of resources. 
C)  more output with a greater quantity of resources. 
D)  both a and b 
E)  both b and c

Question 8

Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point below that PPF.Assuming that the PPF has not shifted,this could be due to

Accepted Answer

A)  a gain of resources. 
B)  a loss of resources. 
C)  technological improvement in the production of both goods. 
D)  an increase in unemployment of some resources. 
A)  a gain of resources. 
B)  a loss of resources. 
C)  technological improvement in the production of both goods. 
D)  an increase in unemployment of some resources.

Question 9

Exhibit 2-9
  
-Refer to Exhibit 2-9.For Alex,the opportunity cost of producing one unit of good B is ____________ unit(s)of good A.

Accepted Answer

A)  3.00 
B)  0.33 
C)  0.75 
D)  1.33 
A)  3.00 
B)  0.33 
C)  0.75 
D)  1.33

Question 10

The law of increasing opportunity costs states that as

Accepted Answer

A)  less of a good is produced, the higher the opportunity costs of producing that good. 
B)  more of a good is produced, the lower the opportunity costs of producing that good. 
C)  more of a good is produced, the higher the opportunity costs of producing that good. 
D)  more of a good is produced, the opportunity cost of producing the good remains the same. 
E)  a and b 
A)  less of a good is produced, the higher the opportunity costs of producing that good. 
B)  more of a good is produced, the lower the opportunity costs of producing that good. 
C)  more of a good is produced, the higher the opportunity costs of producing that good. 
D)  more of a good is produced, the opportunity cost of producing the good remains the same. 
E)  a and b

Question 11

Consider two points on the PPF: point A,at which there are 10 apples and 20 pears,and point B,at which there are 7 apples and 21 pears.If the economy is currently at point A,the opportunity cost of moving to point B is

Accepted Answer

A)  1 pear. 
B)  7 apples. 
C)  3 apples. 
D)  21 pears. 
A)  1 pear. 
B)  7 apples. 
C)  3 apples. 
D)  21 pears.

Question 12

Exhibit 2-1
  
-Refer to Exhibit 2-1.The opportunity cost of moving from point B to A is

Accepted Answer

A)  10,000 units of butter. 
B)  20,000 units of butter. 
C)  50,000 units of guns. 
D)  the maximum amount of butter that can be produced with available resources. 
A)  10,000 units of butter. 
B)  20,000 units of butter. 
C)  50,000 units of guns. 
D)  the maximum amount of butter that can be produced with available resources.

Question 13

Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs),but country 1 produces twice the output that country 2 produces.It follows that

Accepted Answer

A)  country 1's PPF lies further to the right than country 2's PPF. 
B)  country 1 has a smaller population than country 2. 
C)  country 1 has a bigger population than country 2. 
D)  country 1 is efficient and country 2 is inefficient. 
E)  none of the above 
A)  country 1's PPF lies further to the right than country 2's PPF. 
B)  country 1 has a smaller population than country 2. 
C)  country 1 has a bigger population than country 2. 
D)  country 1 is efficient and country 2 is inefficient. 
E)  none of the above

Question 14

Technological __________ in American agriculture has __________ other types of employment.

Accepted Answer

A)  improvement; drawn labor away from 
B)  improvement; released labor to go to 
C)  stagnation; drawn labor away from 
D)  stagnation; released labor to go to 
A)  improvement; drawn labor away from 
B)  improvement; released labor to go to 
C)  stagnation; drawn labor away from 
D)  stagnation; released labor to go to

Question 15

Productive efficiency implies that more of one good can not be produced without a loss of production of the other good.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not true about production possibilities frontiers?

Accepted Answer

A)  moving from one point to another on a PPF incurs a tradeoff 
B)  economic growth is shown by shifting the PPF outward 
C)  unemployment of resources is shown by shifting the PPF inward 
D)  a PPF can shift inward or outward 
A)  moving from one point to another on a PPF incurs a tradeoff 
B)  economic growth is shown by shifting the PPF outward 
C)  unemployment of resources is shown by shifting the PPF inward 
D)  a PPF can shift inward or outward

Question 17

If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 101st unit of good X is 5Y,then the opportunity cost of producing the 201st unit of good is X is most likely to be

Accepted Answer

A)  less than 5Y. 
B)  more than 1/5Y but less than 5Y. 
C)  more than 5Y 
D)  less than 1/5Y but more than zero. 
A)  less than 5Y. 
B)  more than 1/5Y but less than 5Y. 
C)  more than 5Y 
D)  less than 1/5Y but more than zero.

Question 18

Exhibit 2-7
  
-Refer to Exhibit 2-7.Point F is

Accepted Answer

A)  unattainable if the economy's PPF is PPF1. 
B)  inefficient if the economy's PPF is PPF2. 
C)  attainable if the economy's PPF is PPF2. 
D)  all of the above 
E)  none of the above 
A)  unattainable if the economy's PPF is PPF1. 
B)  inefficient if the economy's PPF is PPF2. 
C)  attainable if the economy's PPF is PPF2. 
D)  all of the above 
E)  none of the above

Question 19

Assume that two products are being produced: benches and chairs. Create a table that illustrates constant opportunity costs in the production of these two goods. Draw a production possibilities frontier (PPF)based on the data in your table and explain the condition necessary for a PPF to exhibit constant opportunity costs.

Accepted Answer

The following table illustrates constant

Question 20

If a production possibilities frontier (PPF)is concave outward,it follows that

Accepted Answer

A)  opportunity costs are constant between two goods. 
B)  the opportunity cost (of producing the good on the horizontal axis) rises as more of the good is produced. 
C)  the opportunity cost (of producing the good on the horizontal axis) falls as more of the good is produced. 
D)  the opportunity cost (of producing the good on the horizontal axis) first rises and then falls as more of the good is produced. 
E)  none of the above 
A)  opportunity costs are constant between two goods. 
B)  the opportunity cost (of producing the good on the horizontal axis) rises as more of the good is produced. 
C)  the opportunity cost (of producing the good on the horizontal axis) falls as more of the good is produced. 
D)  the opportunity cost (of producing the good on the horizontal axis) first rises and then falls as more of the good is produced. 
E)  none of the above

Exam 2: Production Possibilities Frontier Framework

It is possible for one person to have a comparative advantage in the production of both goods being produced.

Exhibit 2-5 -Refer to Exhibit 2-5.Which of the following labeled points are productive efficient?

Carlos can produce the following combinations of X and Y: 10X and 10Y,5X and 15Y,and 0X and 20Y.The opportunity cost of one unit of X for Carlos is

Exhibit 2-5 -Refer to Exhibit 2-5.As more fax machines are produced,the opportunity cost of producing them

Exhibit 2-8 -Refer to Exhibit 2-8.Who has the comparative advantage in the production of good Y?

Exhibit 2-9 -Refer to Exhibit 2-9.Who has the comparative advantage in the production of good B?

An advance in technology commonly refers to the ability to produce

Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point below that PPF.Assuming that the PPF has not shifted,this could be due to

Exhibit 2-9 -Refer to Exhibit 2-9.For Alex,the opportunity cost of producing one unit of good B is ____________ unit(s)of good A.

The law of increasing opportunity costs states that as

Consider two points on the PPF: point A,at which there are 10 apples and 20 pears,and point B,at which there are 7 apples and 21 pears.If the economy is currently at point A,the opportunity cost of moving to point B is

Exhibit 2-1 -Refer to Exhibit 2-1.The opportunity cost of moving from point B to A is

Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs),but country 1 produces twice the output that country 2 produces.It follows that

Technological __________ in American agriculture has __________ other types of employment.

Productive efficiency implies that more of one good can not be produced without a loss of production of the other good.

Which of the following is not true about production possibilities frontiers?

If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 101st unit of good X is 5Y,then the opportunity cost of producing the 201st unit of good is X is most likely to be

Exhibit 2-7 -Refer to Exhibit 2-7.Point F is

If a production possibilities frontier (PPF)is concave outward,it follows that

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